Refinancing with a BK

[Anonymous]

Good morning everyone,

  I'm on a 2-year ARM that will mature in about 14 months.  I purchased a home 11 months out of Chap 7 BK with sub-prime financing and lousy terms (7.75% on 1st, 10.5% on 2nd).  We wanted to be homeowners once again after some rough financial years.  In any case, we were proud to get into a home but I'm already thinking about the upcoming ARM jump.  Our FICO's are in the mid-600's and slowly improving.  We are hopeful that we can achieve 700's by the time we try to refinance.  We will save $$$ for closing costs between now and then.  My question is:

1.  Does anyone have a good reputable mortgage company that will refinance a BK person like myself? 

2.  Is there anything else I can do in the next 14 months to better my odds other that what I mentioned above (increase scores, save for closing costs)?

  Of course, my other huge concern is the market and having my home appraise for what I owe.  If the county tax assessment is any indicator of what it will appraise at, I will be about $12K short.  Tough market right now to sell!

Thanks, Mike

[Anonymous]

First off, I have found if you are 2 years from discharge and have scores mid 600's (660 & up) that there are programs out there.   I am in the process of closing on house in 2 weeks and I am at a 684 and 2 1/2 years out.   

Second,  the lending market has tightened up drastically it seems and rates have risen a bunch since you did your original loan. When I asked my lender about an 80/20 she said the going rate on the 1st is about 7-7.5 but the rate of the 2nd would be in the 13 range!!!     Too many defaults with 80/20's the past 2 years so they are killing you on the 2nd.    A 100% financing with PMI was cheaper.  Ask about MyCommunity or Flex100/Flex97 plans and also about FHA loans.   You may find out that the cost of a refi won't save you much or any money long term with the current market conditions.

Good luck!

[Anonymous]

Great advice.  We will see how things play out.  I 've also heard 2 years is the mark lenders want to see a BK seasoned.  I'm active duty military so I could use my VA loan to refi which also requires 2 years seasoning.  Thanks again, Mike